212. How to Manage Budgets, Forecasting and Cash Flow Like Matt Risinger - Matt Risinger
Apr 18, 2025
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In this discussion, Matt Risinger, a prominent Austin contractor and founder of the Build Show Network, reveals effective strategies for financial management in construction. He shares how to master budgets and cash flow to avoid the pitfalls of speculative building. Risinger emphasizes the importance of industry benchmarks to remove guesswork in financial decisions. Listeners will gain insights on why his company never bids on work and how pre-construction processes can enhance profitability while fostering community and transparency in the industry.
Effective financial management, including strong budgeting and cash flow insights, is crucial for contractors to achieve sustainable business growth.
Understanding the essential difference between revenue and profit enables contractors to make informed financial decisions and improve profitability.
Fostering a culture of accountability within teams through performance tracking enhances collaboration and drives progress towards financial goals.
Deep dives
The Importance of Effective Hiring Practices
Contractors face significant challenges in hiring due to the ongoing skilled labor shortage. To combat this, it's crucial to adopt more effective hiring strategies, including optimizing job ads and implementing robust interview techniques. For instance, utilizing successful job advertisement templates can significantly improve the quality and quantity of applicants. Additionally, employing strategies to enhance show-up rates for interviews is vital to securing top talent in a competitive market.
Financial Management as a Key to Success
Understanding financial management is essential for contractors aiming to grow their businesses sustainably. Many contractors experience financial strain from focusing on revenue growth without sufficient profit margins. Learning from past mistakes, such as mismanaging cash flow, can provide contractors with invaluable insights to make more informed financial decisions. By developing strong budgeting skills and analyzing key financial metrics, contractors can ensure their businesses remain profitable, even during economic fluctuations.
Understanding Profitability Metrics
The difference between revenue and profit should be crystal clear for contractors seeking a successful business model. Revenue growth can often be misleading if it's not accompanied by healthy profit margins. As shared in the discussion, many businesses generate impressive revenue figures but struggle with profitability, ultimately leading to financial challenges. Contractors should focus on key metrics, such as gross and net profit percentages, to gauge their true financial health and make necessary adjustments.
The Role of Budgeting in Business Stability
Budgeting serves as a fundamental practice for contractors aiming to maintain financial control and predictability. Establishing an annual budget allows contractors to manage expenses, forecast revenues, and allocate resources effectively. Regular budget reviews help identify areas of overspending and underperformance, and they can empower teams to stay aligned with financial goals. Ultimately, a well-structured budget can motivate contractors to strive for profitability while mitigating risks associated with fluctuating costs and market conditions.
Building Team Accountability and Performance
Creating a culture of accountability within a contractor's team is pivotal for driving performance and achieving financial goals. By implementing a dashboard that tracks key performance indicators, teams can easily monitor their progress in real-time. Each team member should have specific metrics they are responsible for, fostering a collaborative environment where everyone has a role in achieving business objectives. Regular meetings to discuss these metrics can enhance communication, ensure alignment, and drive continuous improvement across the organization.
Strategies for Sustainable Growth
Contractors must adopt disciplined strategies for sustainable business growth, particularly as they transition from being hands-on operators to effective leaders. The focus should shift from merely completing projects to creating a scalable and well-organized operation. Hiring the right leadership talent or leaning on external business coaches can facilitate this transition. By aligning their operations with growth strategies and prioritizing efficiency, contractors can ensure their businesses thrive while minimizing operational risks.
On May 6, attend our free web class to learn the proven hiring framework top contractors use to attract and retain A players during a labor shortage. Register here: https://trybta.com/CE-HIRING-M25
A few weeks ago, Danny cohosted a web class with Matt Risinger (Host of The BUILD Show) on one of the most important topics in business: finances.
On top of teaching the hundreds of attendees our approachable financial management systems, I had a chance to pick Matt’s brain about his experience managing cash flow as he grew his company into the monster it is today.
So we’re releasing the web class on the podcast to give you everything you need to run your finances like a 7-figure contractor.
We’re covering budgets, forecasting, cash flow, and how to drive results with your team.
If the thought of financial management gives you a migraine, this webinar replay is for you.
Episode Highlights:
Discover the least painful way to track your budgets, forecasting, and overhead—without wasting hours with mind-numbing numbers.
Learn how to take the guesswork out of your financial decision-making by understanding your industry benchmarks.
Get insight into how Matt Risinger avoids lumpy cash flow and why Risinger Build NEVER bids on work.
00:00-Intro
06:12-About Danny and Matt
10:06-Purpose and outcomes
12:18-Why is staying on top of your numbers so hard?
20:39-Matt Risinger on Breakthrough Academy
23:15-Budgeting
38:43-What does “good” look like?
41:20-Gross profit margins as you evolve
46:14-Financial forecasting
52:19-Driving numbers with your team
59:37-Implementing change
01:07:09-Q&A
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